Costa Rica — Business: Hiring Employees

Why this matters

The employer-side CCSS contribution (~26.67% of salary, on top of wages) and mandatory aguinaldo/severance obligations are large, real costs that fundamentally affect the true cost of hiring in Costa Rica — a business budgeting only for gross wages would significantly underestimate total employment cost.

Key facts

• Employers must register with the CCSS (Caja Costarricense de Seguro Social) and contribute roughly 26.67% of each employee's salary; employees contribute roughly 10.5% (withheld from pay).
• Aguinaldo (13th-month salary/Christmas bonus) is mandatory for all employees, calculated as one-twelfth of total wages earned during the year, and must be paid by December 20.
• Employees are entitled to a minimum of 14 working days of paid vacation after 50 consecutive weeks of service; any unused, accrued vacation must be paid out in full at the end of employment regardless of the reason.
• Severance pay follows statutory formulas based on length of service and reason for termination, and a full severance settlement can include up to four separate payment components (e.g., notice pay, cesantía/severance, unused vacation, proportional aguinaldo).
• For foreign hires, the employer must first obtain MTSS (Ministry of Labor) authorization before the employee's DGME work-permit application can proceed (see the Residency: Work Visa page).

Steps

1. Register the business with CCSS as an employer — Before hiring, register with the CCSS to enable payroll contributions for the employee(s).
2. Budget for total employment cost, not just wages — Add roughly 26.67% employer CCSS contribution plus aguinaldo accrual (~8.3% of wages) and vacation/severance exposure on top of gross salary when budgeting.
3. For foreign hires, obtain MTSS authorization first — A Costa Rican employer must get MTSS authorization to justify hiring a foreign worker before that worker's DGME work-permit application can proceed.

Costs

• Employer CCSS contribution: Roughly 26.67% of salary
• Employee CCSS contribution (withheld): Roughly 10.5% of salary
• Aguinaldo (13th-month pay): One-twelfth of the employee's total annual wages

Timelines

• Aguinaldo payment deadline: By December 20 each year
• Vacation eligibility: 14 working days minimum after 50 consecutive weeks of service

Required documents

• CCSS employer registration
• Employment contract
• MTSS work authorization (for foreign hires) and DGME work permit

Common mistakes

• Budgeting only gross wages and forgetting the ~26.67% employer CCSS contribution plus aguinaldo and vacation/severance exposure
• Missing the December 20 aguinaldo deadline
• Not obtaining MTSS authorization before starting the DGME work-permit process for a foreign hire